One of the biggest points of contention in many divorces is the division of marital property and financial assets. If there are hard feelings, one spouse may try to deprive the other of their share of the marital property. In other cases, a spouse may think they have a stronger claim to certain assets than the other marital partner does. Sometimes, one spouse will hide bank accounts or assets as part of an effort to circumvent the equitable distribution process.
North Carolina law calls for the presiding judge in a divorce case to approve an equitable division of marital assets. This is impossible without a full inventory of marital assets. If the judge is going to grant spousal support to one party, the amount ordered will be based in part on the receiving party’s financial capabilities compared to the lifestyle they had while married. If there are hidden assets, the judge cannot make a valid decision.
What are the Legal Consequences of Concealing Assets During Divorce?
Because each party is required to divulge all assets, hiding assets during a divorce amounts to contempt of court. A judge may issue sanctions and require the spouse who is found to have hidden assets to pay the other’s legal fees. The judge can even grant higher alimony payments. In some cases, a person found to have hidden assets during a divorce may face criminal charges for fraud.
To summarize, if someone conceals assets during a divorce, they could face several consequences:
- Contempt of Court
- Monetary Penalties
- Criminal Charges
- Damaged Reputation in Court
Do not attempt to hide assets if you are heading for a divorce. If you are dealing with an impending divorce and think your spouse is concealing assets, a divorce lawyer from Charles R. Ullman & Associates can explain your options for ensuring a valid asset division process. Above all, we can take steps to protect your financial interests in a divorce, including finding your spouse’s hidden assets.
To learn more, contact us today. We serve clients throughout Raleigh, Wake County, and central North Carolina.
What it Means to Hide Assets During a Divorce
As part of a divorce proceeding in North Carolina, each party must submit to the court a full list of their assets – both marital and separate property – so the marital estate may be properly divided.
Under the law, assets acquired after marriage and before separation are marital assets. Only marital assets can be divided. Assets acquired before marriage or received as a gift or inheritance during the marriage are treated as separate property.
The division of assets in a divorce requires identifying all property as “marital” or “separate,” attaching a value to each asset, and then dividing all marital assets “equitably,” or fairly. In some cases, property may be sold and the proceeds evenly split. Sometimes, trades will be made so one party may keep certain items that are more meaningful to them in exchange for giving up something else.
In an amicable divorce, the couple negotiates the division of assets with guidance from their attorneys and perhaps a mediator and presents a plan to the judge for approval.
In a contested divorce, either party may file a claim for equitable distribution and ask the judge to decide issues of identification, classification, valuation, or distribution of assets.
One party might conceal bank accounts, investments, or other sources of income, jewelry or anything of value from their spouse. Sometimes it’s a simple as never mentioning the asset exists or stating that it was sold, traded, or lost long ago. Other times, a person might try to “gift” the asset to a family member with an agreement to get it back after the divorce is final.
The problem is that hidden assets result in the judge having an incorrect picture of the divorcing couple’s financial status. That adversely affects court decisions about alimony and/or child support.
Hiding assets risks incurring fines and other penalties from the court. If you are hiding assets, you’re likely to be caught. At Charles R. Ullman & Associates, we know how to uncover hidden assets.
We’ll Help Find Your Spouse’s Hidden Assets
If you have suspicions that your spouse is concealing assets, your divorce attorney can file motions to have your spouse disclose certain information that will help reveal the property and financial holdings. These discovery motions include:
- Document demands. We can compel your spouse to produce specific documents, such as bank and broker account records, tax returns, financial statements, and loan documents.
- Inspection demands. We can demand your spouse allow you to inspect the property, which allows you and an expert to independently determine its value.
- These are written questions your spouse must answer in writing and sign under oath with the penalty of perjury if the answers are knowingly false.
- These are questions posed to your spouse under oath while you, your spouse, and your lawyers appear before a court reporter, who prepares a transcript of the proceedings. Legally, your spouse must provide honest answers to questions asked by your attorney or face criminal penalties. We can also depose others who are privy to your spouse’s financial affairs, such as business partners.
- Requests to Admit Facts. In this form of discovery, your lawyer presents your spouse with facts about possible assets and asks whether the statements are true or false.
When an opposing spouse is believed to be making a concerted effort to hide substantial assets, we can hire a forensic accountant to examine their financial records. Forensic accountants figure out where missing money has gone, how it was moved, and how it may be recovered. They may testify as expert witnesses and present reports of their findings as evidence during divorce hearings.
Enlisting the help of accountants is often useful for dividing the assets of couples who have complex financial portfolios. The accountants can help determine the value of the stock options and/or restricted stock units, deferred compensation, closely-held businesses, professional practices or complicated partnerships, assets held in trusts, or multiple accounts and properties in different states or countries.
Think Your Spouse is Hiding Assets? Let Us Take a Look
If you think your spouse is hiding assets as you head for divorce, the divorce attorneys at Charles R. Ullman & Associates can step in to protect you. Work with a North Carolina property division attorney who has the experience and resources needed to sort out a complicated financial picture. Contact us today to schedule a confidential review of your case.
